Copy of the company's press release issued after the market close today is available at www.glaukos.com. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. This call is being recorded and an archived replay will be available online in the Investor Relations section at www.glaukos.com. I will now turn the call over to Chris Lewis, Director of Investor Relations and Corporate Strategy and Development.
Thank you, and hello, everyone. Joining me today are Glaukos' President and CEO, Tom Burns CFO, Joe Gilliam and COO, Chris Calcaterra. Following our prepared remarks, we'll open the call to questions. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. If you still have additional questions, you may get back into the queue.
Please note that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward looking statements. These include statements about our plans, objectives, strategies and prospects regarding, among other things, our products, our pipeline technologies, our U. S. And international commercialization efforts, the efficacy of our current and future products and our competitive market position, financial condition and results of operations. These statements are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control.
Therefore, they may cause our actual results to differ materially from those expressed or implied by forward looking statements. Review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investors section of our website at www.glaukos.com. With that, I'll turn the call over to our President and CEO, Tom Burns.
Well, good afternoon and thank you for joining us. Today, Glaukos reported another strong quarter with 3rd quarter net sales of $43,900,000 up 9% versus the year ago quarter and up 2% sequentially. Given performance that has exceeded our expectations through the 1st 3 quarters of this year, we are raising our 2018 net sales guidance range to $175,000,000 to $177,000,000 versus our previous range of $162,000,000 to $166,000,000 Joe will discuss our financial results and outlook in more detail later in this call. In addition to delivering another record of quarterly revenues in the 3rd quarter, we also commenced the U. S.
Commercial launch of the iStent inject, our next generation trabecular micro bypass device. As we sit here today, I could not be more pleased with the execution of our rollout strategies and the initial response of surgeons to iStent inject, leaving me more enthusiastic than ever about the product's prospects and what it means for Glaukos going forward. We've long believed that iStent inject with elegant and facile implant procedure will be a compelling new treatment option for U. S. Ophthalmic surgeons and patients given its stellar clinical safety and efficacy results, predictable performance and based on our experience in international markets where over 40,000 iStent injects have already been implanted.
2 months into the U. S. IStent inject launch, these high expectations are being realized as we receive feedback from surgeons who have begun using iStent inject and reporting their initial results. Surgeons consistently highlight the straightforward nature of the implant procedure, providing them with confidence and predictability of stent placement. They've also noticed an increased likelihood for greater IOP reductions with promising early results given the 2 patent bypass openings through the trabecular meshwork, which are designed to create multi directional flow through Schlemm's canal.
This positive response was on full display at the recent American Academy of Ophthalmology Annual Meeting, where our technologies were featured in multiple surgeon presentations. In addition to showcasing a robust iStent inject marketing campaign at the show, we held a widely attended major MIGS educational symposia for active and potential iStent and iStent inject implanters titled introducing iStent inject, MIGS transformed that featured an informative panel discussion with prominent key opinion leaders. Overall, we believe U. S. Surgeons experience to date validates what we've already seen in clinical literature and numerous international markets where the product has been commercially available.
Namely iStent injects ability to achieve sustained IOP reductions that appear to be equivalent or better than U. S. Pivotal trial results through a minimally invasive elegant tissue sparing procedure. From an operational perspective, the inject launch is following the same blueprint that proved successful with the original iStent, a controlled, methodical, tactical launch anchored by superlative sales rep training and skills transferred to the surgeon to achieve optimal procedural proficiency and patient safety. As we've always said, good outcomes translate into good long term utilization.
We successfully completed the full training of our sales force in August and commenced full commercial launch activities in September. Our initial focus has been on converting our existing installed base of trained U. S. IStent surgeons and I'm happy to say we're tracking in line with our internal conversion expectations. Our near term primary commercial focus will continue to be on this conversion progression well into 2019 with a gradual shift of our reps back to training new surgeons who have yet to adopt MIGS along with increasing utilization within existing accounts.
As a reminder, iStent inject is based on the same fluid method of action as our 1st generation iStent, which over the last 10 years has been implanted in more than 400,000 eyes worldwide since its introduction and has earned an outstanding reputation of demonstrated efficacy and safety. Early surgeon feedback and initial iStent inject clinical and physician study results indicate the product and procedure comes with a superlative safety profile synonymous with our 1st generation iStent. Since our founding, we have focused 1st and foremost on safety. Our strategy was and is to deliver MIGS technologies that offer the most favorable benefit to risk calculus for the surgeon and the patient depending upon their stage of glaucoma severity. Safety has been the foundational driver behind not only the fundamental design and size of our products, but also the clinical and commercial cadence of our initial flow products and pipeline.
The significant body of clinical and real world experience with iStent and iStent inject represents a highly favorable device safety profile. IStent inject represents the first in a cadence and a cascade of anticipated new product introductions over the next 5 years. To that end, we continue to make great strides in advancing our pipeline of microscale surgical devices and sustained pharmaceutical systems for both combo cataract and standalone procedures. We believe these pipeline platforms, if approved, will significantly expand our market opportunity at a solid cadence and uniquely transformed Glaukos into the hybrid pharmaceutical device company that is well positioned for growth and leadership well into this next decade. As we discussed on our quarterly call, we have commenced the concurrent Phase 3 studies for idotetravoprost and patient enrollment continues to proceed in line with our expectations to support our FDA approval target of late 2021 to 2022.
If ultimately FDA approved, we believe the iDose Travoprost will not only be instrumental in addressing the challenges of patient non compliance with topical glaucoma medications, but also pave the way for a new treatment algorithm where surgeons use iDose alone or in combination with other therapies, including our portfolio of surgical flow devices to more effectively manage patients IOP. Further, we believe the powerful iDose travel traboprost data available thus far underscores the potential of our iDose drug delivery platform to produce future generations of sustained therapies for glaucoma and potentially other ocular diseases. While we actively recruit our iDose pivotal trials and await the associated recommencement of our iStent SA pivotal trial, we're happy to announce we have commenced patient enrollment for our 510 pivotal trial for the iCEN Infinite, our 3 stent standalone product for advanced and refractory glaucoma patients well ahead of our initial timing expectation by year end. As a reminder, this will be a prospective multicenter single arm clinical trial that will enroll roughly 65 refractory subjects. We continue to target FDA approval for iStent infinite in the late 2020 to 2021 time period.
Finally, the 2 year patient follow-up in the pivotal trial for iStent Supra, our suprachoroidal stent will be completed in the Q1 of 2019 and we continue to target FDA approval in 2020. As we said all along, we continue to see the suprachoroidal space as a potential second line niche treatment option for more moderate to progressive open angle glaucoma patients given its higher risk to benefit profile versus the trabecular meshwork. We look forward to closely working with the FDA for this product once the pivotal data becomes fully available next year. As a result of the notable progress we're making on all fronts of our business and as we turn the corner towards 2019, we are accelerating key investments we're making for the future. These investments span across all major facets of our business, including R and D.
With the success we've seen in the advancement of our flow and pharmaceutical platforms, we continue to add highly talented scientists, chemists and engineers to form a powerful team equipped with state of the art equipment to pursue early stage product development, novel sustained pharmaceutical systems and platform optimization. In clinical and regulatory, we're optimizing our worldwide leadership and organizational structure and adding resources internally that expand our capabilities and presence in the field to support global clinical study requirements, targeted regulatory approvals and post approval studies. We're moving forward investment to enhance and upgrade our global systems capabilities and to broaden our technology infrastructure to support this future growth. And finally, in our commercial organization, we continue to invest and expand our sales force, marketing and market access teams both in the U. S.
And abroad. As you know, the expansion of our direct sales presence in key international markets has been an important recent investment focus for us. In addition to the 16 international countries where we have a direct market presence today and continue to add resources, We are evaluating and making initial investments in potential new international markets where we hope to enter in the coming years. The investments to date are being validated as the momentum continued to build internationally during the Q3 with OUS sales growth of 57% year over year. Our growth continued to be broad based globally with Australia, Germany, Japan and UK leading the way.
In Australia, the permanent reimbursement code covering the implantation of iStent and iStent inject in combination with cataract surgery became effective on November 1. While we've been impressed with our team's abilities to sustain growth in this region despite not having any professional fee reimbursement, we are pleased to have secured appropriate economics for implanting physicians in Australia. Combined, we believe the investments we're making today will help to fuel our continued growth and solidify the foundation from which our franchise can significantly expand over time as we advance our aspirational mission to transform glaucoma therapy. So with that, I'll turn the call over to Joe for a summary of the Q3 financial results. Joe?
Thank you, Tom. As noted earlier, net sales for the Q3 of 2018 were $43,900,000 a year over year increase of 9%. The U. S. Represented 83 percent of our sales in the quarter and international 17%.
In the U. S, Q3 2018 sales were 36 point 4 $1,000,000 up 2% from the same period a year ago. U. S. Sales in the quarter were impacted by channel destocking ahead customer conversions from iStent to iStent inject as expected, which was partially offset by the competitive market developments late in the quarter.
ASPs remained stable year over year and versus prior quarters. Outside the U. S, 3rd quarter sales were $7,500,000 an increase of 57 percent from the same period a year ago. Our international business continued to outperform expectations as core market growth more than offset EU summer seasonality headwinds. This quarter Australia, Germany, Japan and the UK drove the majority of the year over year increase led by growing iStent inject sales.
Our gross margin in the 3rd quarter was roughly 86.3% versus 85.9% in the same quarter in 2017. We continue to expect our gross margins to remain in the mid-80s percent range going forward as we navigate the U. S. Inject launch from an operations perspective. SG and A expenses in the 3rd quarter rose 31 percent to $31,600,000 versus $24,100,000 in the year ago quarter.
This rise reflects higher personnel and other costs related to the ongoing expansion of our domestic and global infrastructure, primarily in our commercial and international operations and investments associated with the iStent inject launch. R and D expenses rose 35% in the 3rd quarter to $13,200,000 versus $9,800,000 in the same year ago period. This rise reflects primarily the cost of additional personnel as we expand our pharmaceutical R and D capabilities and within clinical affairs where in particular the direct costs associated with the iDose trial enrollment continues to increase. We finished the Q3 with a net loss of $6,600,000 or $0.19 per diluted share compared to net income of $1,300,000 or $0.04 per diluted share in the Q3 of 2017. As of September 30, 2018, we had cash, cash equivalents and short term investments of 137 $800,000 compared to $120,100,000 at the end of the Q2 2018.
As we said before and consistent with Tom's remarks regarding the investments we are making, it's important to remind you that as we progress through 2018 and into 2019, our primary focus remains on long term growth as we prudently invest to build the MIGS market, drive increased penetration of our iStent and inject platforms globally, drive our robust pipeline initiatives through necessary clinical studies and programs and advance new opportunities in the clinical studies. Finally, as Tom indicated earlier, we are raising our 2018 net sales guidance to $175,000,000 to $177,000,000 up from our previous range of $162,000,000 to $166,000,000 This guidance outlook takes into account our continued organic outperformance, the updated MIGS market landscape, the new doctor training and destocking dynamics associated with our inject launch and the expansion of our international sales, which we now expect to be at least $28,000,000 for the full year, up from our previous range of $25,000,000 to $27,000,000 With that, I'll now turn the call back to Tom.
All right. Thanks, Joe. So to recap, Glaukos delivered strong financial performance in the Q3 with record revenues, while achieving a major commercial milestone with the commencement of the U. S. Commercial launch of iStent inject.
I'm very pleased with the initial rollout of iStent inject and with the early surgeon feedback that reinforces our confidence in the product's potential to drive MIGS closer to becoming a standard of glaucoma care. As I think about the future of our business, I remain convinced that the substantial investments we're making today to deliver our pipeline and to expand our franchise and fuel sustained growth for many years to come. I want to thank the more than 400 Glaukos employees who dedicate their talents, determination and energy to advancing our aspirational mission to transform glaucoma therapy. I am very optimistic about the franchise we're building and I believe in the proven ability of our team to continue to create meaningful shareholder value. So with that, I'll open the call to questions.
Operator?
Your first question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Please go ahead.
Hi, guys. It's Adam Mater on for Larry. Thanks for taking the questions. I wanted to start with a question on next year. So as we start looking ahead to 2019, there are a handful of moving parts.
I think the expectation is for about 20% U. S. Cricket growth in 2018. Should we be thinking about a similar rate of growth next year with a full year of Inject and no CyPass in market. Would you expect to largely capture all the available CyPass here next year?
And just any thoughts on trialing in 2019 from Ivantis? And then I had a follow-up.
Hey, Adam, it's Joe. I might take that a little bit in reverse. So I think we've been on record with respect to CyPass share recapture, that it's really it's not going to be a 1 to 1 correlation. I think that's the marketplace is still evolving, as we move forward here. But I think we remain of that view, that we expressed in the early days post the recall.
As we turn the corner to 2019, we're obviously not going to give guidance here today, but I think I can provide a little incremental color that will hopefully be helpful as folks think about the trends heading into 2019. We do feel good about the underlying market growth dynamics heading into the year as Tom indicated in his remarks. From a doctor conversion to inject standpoint, we would expect to end the year with approximately half or at least half of our doctors in the training funnel. And that's ahead of our original expectations as we enter the launch period. So what does that translate into the dynamics, we've discussed on prior calls?
It means that, 1, the conversion of doctors to iStent inject will continue well into 2019. 2, it means that the sales force will gradually return their focus to new doctor and same store sales expansion over the course of 2019. 3, means the channel destocking should largely subside from a macro standpoint as we enter the year. And lastly, finally, we would expect that the lack of new doctor training in the second half of twenty eighteen would have a lag effect in the first half of twenty nineteen. So hopefully that gives you some color around how we're thinking about the setup going into the year, both from a market perspective as well as a glaucomspecific perspective.
That's helpful. Thanks. And then just for my follow-up, I was hoping you guys could level set us on the current status of reimbursement. It looks like the calendar year 2019 facility fee is favorable once again. On the physician side, Novitas recently lowered the physician reimbursement for 0191T, I think to around $3.70 or so.
How many of the MAX are now in this $300,000,000 $4 range? And then you're also seeking incremental reimbursement for inject with 0376T. How many of the MAX are providing additional reimbursement for this code? And just any comments around the impact that you've seen to same store sales growth following these cuts to physician reimbursement in the past? Thanks for
Adam, this is Chris. Let's start out with the regs that came out for next year. We were quite pleased with those. For the ASC setting, it's about $114 incremental payment over 2018. And in the hospital HOPD, it's about another $30 I believe.
So these are incremental, and that's a very positive thing. As it relates to Novitas, they did reduce their professional fee down into that $3.70 range, which is in line with what we've been communicating to everyone that we felt that it needed to be between that $300 $500 range. There's only one MAC that has not reduced their fee, and that's First Coast in Florida. They're at the $800 range. And as we've guided you guys in the past, we would expect at some point for them to do the same.
We still feel that within that band, that $300 to $500 range, there's plenty of incremental dollars per physician to be adequately reimbursed for implanting iStent or iStent inject. As it relates to 3,760, this is an add on code. This is a code that some that we're encouraging people to utilize when they implant iStent inject. This would be above and beyond what they would get for implanting an iStent, in this case, a second iStent inject. We have one MAC that is covering it and others that have been sporadic in their coverage of it.
We're hopeful that this will be something that all the MACs will adopt, but we still think if that doesn't happen that there's enough here to have a favorable prophy response for implantation of iStent inject.
Great. Thank you very much.
Your next question comes from the line of Brian Weinstein with William Blair. Your line is open. Please go ahead.
Hey, guys. Thanks for taking the question. Can we talk about market growth expectations here? I think it was alluded to and just before and you guys have consistently commented on 20%. Is that still what you're seeing?
Did you see any slowdown or have you even seen any slowdown? Do you anticipate seeing a slowdown as a result of the safety concerns with CyPass into the market? We'll start with that and then I have a follow-up. Thanks.
Hey, Brian, it's Joe. So, 1st and foremost, the 20% target that we expressed on the guidance call for 2018 was a full year target. And I think we were pretty consistent on the subsequent calls of saying what we really expected was that to be somewhat front end loaded and to be disrupted by our own activities in the second half of the year, specifically around the iStent inject conversion. And I think that's exactly how it's played out over the course of the year. In the first half, we saw market growth that exceeded 20% from an organic perspective.
And as we got into the Q3, I think we saw growth that was a little bit below 20%. Again, not surprisingly given that new doctor growth slowed substantially and we saw channel destocking ahead of the inject conversion.
Okay. And then, Tom, it sounded like when we met in Chicago last weekend or whatever it was 2 weekends ago, that you guys were excited obviously about inject, but one of the things that seems like it came out was the notion that clinicians may be seeing better IOP reduction than what we've seen in the clinical trial. Can you just talk to why that may be the case? I recall that as we saw iStent play out, we saw better results in the real world over time. But can you just talk about what specifically you've been hearing on that and the importance of that?
Thanks.
Yes, I'd be happy to. So I think what we're seeing with iStent and JAKMARIS, what we saw with iStent. In the pivotal trial in iStent and subsequent to that, we saw progressively more marked reductions in intraocular pressure as surgeons became more facile with the procedure, understanding placement within the trabecular mesh work, understanding how close or far apart to place the stance to areas where they felt they were getting full flow into the episcleropenia system. Likewise, I think we're seeing the same thing here. We're seeing surgeons that even though this is a very facile, elegant procedure, there are nuances that can be adapted as they incorporate new pearls, which allow them to get even greater pressure reductions.
Reductions. So as I think all of you are doing your channel checks, I think you're hearing the same things we're hearing, which are surprisingly strong and robust reductions in intraocular pressure that appear to be better than what we saw in the U. S. Pivotal trial. So I think it's all seasoning and I think incorporation and facility and use of the procedure over time.
Your next question comes from the line of Robbie Marcus from JPMorgan. Your line is open. Please go ahead.
Great and congrats on the good quarter. Thanks. Hoping you guys can help us understand the current dynamics in the market. So now with CyPass off, help us understand how doctors are thinking about MIGS? Before, I had always had the understanding that it was a toolbox approach.
We use some for certain patients, some for other patients. But I always had the understanding that doctors wanted to use MIGS because there aren't a whole lot of other options for these patients. So I understand not every patient is going to go from that you lost in CyPass or that they lost CyPass sales to iStent. But help us understand what you're hearing from physicians around the decision making of patients that maybe would have formally had CyPass and where how they're getting treated today?
I'll ask Chris to respond and I may add some color.
Robbie, so as time went on, the CyPass device, and not in all cases, but tended to move to more moderate to advanced glaucoma. And that was, as we've always said, had a lot to do with the risk associated with that product. So those devices that are now off the market, I think some doctors are looking at iStent inject, but they're also looking at the all other bucket. And the all other bucket, as we described it, is primarily utilized by glaucoma specialists who are treating most of these moderate to advanced glaucoma patients. That's the Omni, the different canalicular devices, etcetera.
So that's where most of the glaucoma specialists are going. With the cataract comprehensive guys, they're certainly looking at us. We would expect that they would look at the other competition as well. So that's where it is right now. And I think it was obviously beneficial for us in terms of the timing of our introduction of iStent inject.
I would just add that as we've said all along, we felt and we've said that with the CyPass as well that we thought that glaucoma specialists would be more attracted to the use of a suprachoroidal stent because they have a higher degree of tolerance for some of the collateral and sequelae that can be associated with the product. And because a lot of times they're digging deep and trying to get as profound pressure reductions as possible. So even though the means of suprachoroidal stent and trabecular bypass stents tend to be similar in clinical trials, because of the atherosclerovenous back pressure associated with trabecular bypass stents, you're not going to see pressures in typically in the 6 millimeter to 8 millimeter range. And this is where glaucoma specialists are trying to reach for certain candidates. So they don't have to move to a trabeculectomy or to an aqueous shunt procedure.
So this is the niche area that we think that suprachoroidal stents largely defined. We said this now since we've gone public. And because of that niche, we think this is why there's not going to be a typically a 1 to 1 conversion, because as you know, as powerful as our trabecular bypass stents are, they're not going to invariably reach down to the 6 millimeter to 8 millimeter target range that you need with some of these very, very progressive patients. Now, what that portends though is the need for when we have a suprachoroidal stent, we may have the opportunity to fill that niche. And so we remain optimistic about the algorithm.
We've been very consistent about the placement. And by the way, this has played out, I think very, very similar to what we said in the marketplace since our IPO. And we expect that we'll have the full treatment algorithm in the future to treat all disease stage severities.
And Ravi, from a market modeling perspective, when we've quoted and talked about 20% growth, we've never included those late stage procedures such as tubes or traps or even a ZYN type procedure in that in those estimates.
Okay, great. That's helpful. And maybe a follow-up, Joe or Chris. The spending in the quarter was a bit higher than I had expected. Maybe help us understand as you're launching inject, as you're converting the market, help us understand what sort of selling and marketing activities are going on?
And maybe if you could give us any thoughts on the trend line into 2019, that would be really helpful. Thanks.
Robbie, I'll start out at a high level on the sales and marketing. With a product like this, we've made significant investments into the promotion of this product. We had some robust marketing activities at the AAO. We've had some activities associated with advertising and then certainly the training of the sales organization, all of which were moved up, if you will, because of the early approval of iStent inject.
Yes. And it's Joe. I would just add, in addition, there's obviously all the promotional activities in terms of the training activities and the products used in training and things like that that are incremental costs associated with the launch. And then on the R and D side, largely as expected, right? I mean, as we continue to pick up steam in the iDose trial in particular, you're going to see that R and D and clinical spend continue to accelerate going forward and into the 2019 timeframe.
So, some expenditures in the quarter that were a little bit more one time in nature, but generally, as you heard Tom say, we're continuing to prudently invest and reinvest in the business for the long term future, both commercially as well as from an R and D perspective.
Thanks a lot.
Your next question comes from the line of Bob Hopkins with Bank of America. Your line is open. Please go ahead.
Thanks and good afternoon. Joe, if okay, I want to start with you. You made a few comments around things to consider for 2019. And I appreciate those comments, but there's a lot of moving parts to 2019. And I'm not 100% sure of the net kind of take home around your comments beyond it's not going to be a perfectly clean year.
So my initial take when I put all these comments that you've made together is that the consensus of $231,000,000 probably is a little too aggressive given some of the things that you said, but I'm not really sure of that. And I just wanted to ask preliminarily, am I reading your comments correctly?
Well, I appreciate the question, Bob. I think obviously we're not going to give guidance sitting here on this call or endorse specifically where the Street is at beyond trying to give some incremental color. I think it's a unique situation heading into this call obviously with what transpired during the quarter and folks had to put together a pretty significant change in their models both for the remainder of this year and going into next. Hopefully, the guidance that we're giving for 2018 is an important data point to level setting expectations around where the business is headed. And then we try to give some incremental color around those growth drivers heading into next year.
And make no mistake, I think what you're hearing from Tom, Chris, myself is optimism with respect to the market development and what's happening fundamentally underneath it, and inject being an important driver of that for us. We're ahead of schedule on that. We feel very good about what that means as we head into 2019. My comments were designed to help you get a bit more granular as you think about what that translates into quarter in and quarter out of the course of 2019, and once you've already level set based upon the guidance we've given in 2018.
Yes. No, I appreciate that. And I hear the optimism. And I think there's reason clear reason to be optimistic. And there's just some things that will impact like channel stocking like we can't model channel stocking, doctor conversions like these are some things that are just very challenging as outsiders to models.
I was just trying to get some sort of quantification of those kind of temporary headwinds, if you will, or just want to make sure I understood what the message is given the uniqueness of the situation we're in right now?
No, I certainly understand that. I think if you think about even from the perspective of communicating another level of granularity, It's within these accounts, you have multiple doctors within an account. If one was a CyPass user, 2 were being trained on inject, there's some destocking activity. There's enough moving parts there that becomes pretty difficult to quantify in a way to break down each individual component for you to model that. But what I can say, I guess, to sort of put a finer point on a couple of them, we are saying going into 2019, just to be clear, that we think the channel destocking should be largely behind us, right?
That if you think about it from a doctor conversion standpoint, what I said was that we expected to enter 2019 with more or at least half of our doctors in the training funnel. So you get past that halfway mark, then you sort of offset each other with between restocking of customers who are now on inject versus destocking of the ones that are still being trained and it becomes a net neutral, right, as you enter into 2019. I think you can also take from that data point around where we'll be at from a training standpoint kind of the pace in which we're converting existing iStent users to inject and that should help you as you think about the cadence of what that means for the business into 2019. And then really the last thing that I tried to highlight was, I don't want to be lost, which is, as we've had a pretty substantial and as we've forecasted, a pretty substantial slowing of new doctor training, that's not just a second half of twenty 18. There will be some lag effect associated with that as we start the market or the year off in 2019 from a market growth perspective.
Okay. That's super helpful. I appreciate it. And then lastly, just quickly, and I completely hear what you guys are saying in terms of Alcon not being one for 1. That makes total sense.
But I'm still curious, do you guys what is your best estimate as to what the Alcon run rate was with iPass at the time of the recall?
Well, Bob, it's Joe. I think we have a pretty good sense of what that run rate was. We're somewhat prohibited from getting too granular given confidentiality obligations and the like. But I will say maybe the one comment I'll say is I think when I look back at some of the modeling that was done across the buy side models for 2017 and even in 2018, I think folks were a little bit ahead of the true run rate of CyPass during that timeframe. But beyond that, I can't get much more granular.
Okay, great. Thanks very much. That's all I got.
Thanks, Bob.
Your next question comes from the line of Matthew O'Brien with Piper Jaffray. Your line is open. Please go ahead.
Good afternoon. Thanks for taking the questions. Just as a starter, and I know it's early days here, but can you just give us any kind of sense for the utilization in your inject accounts here in the U. S? Is it higher than what you were saying with iStent alone?
It's Joe. I think you sort of set it up the right way, Matt. It's a little bit early for us to probably be commenting on that. I think we've all been on record that the product itself in the surgeons' hands, they like using it, right? And so I think that sets up well for expanded utilization as we make our way into 2019.
But I think it's just too early to be seeing those trends develop now.
Anything you can provide qualitatively as far as introductions in Europe or U. S. Countries?
Yes. As we said in the past, Matt, we've been very pleased with what's happened in Australia and Canada and Germany and now the U. K. With iStent inject. And I would say that we've had similar feelings here about the U.
S. The reception for iStent inject has been very positive. I couldn't be more pleased with the execution and the rollout strategies of this campaign. Doctors are enthusiastic about the product. They're pleased with their outcomes.
They're as we've spoken before, they're pleased with the predictability of it, the elegance of the procedure, the ease of use and certainly the outcome. So things are going very well.
Our challenge, Matt, on trying to extrapolate from the OUS experience is just the in is so small outside the U. S. If you were doing $1,000,000 of sales in a country and you launch inject and you do $2,000,000 I don't think that's a trend that you can extrapolate directly United States given we're just at a different stage of market development.
Yes, that's fair. And then as my follow-up, as I look at the Q4 guide here, it's up easy math about $6,000,000 sequentially. This time last year, you're up about $1,000,000 So is that a I know there's some destocking in there, so that's a little bit of a headwind, but that bump there and I get and again international is doing well, but that bump feels like it's largely attributable to the new CyPass coming off the market. Is that a fair way of viewing kind of the impact there? And again, not getting the full impact of CyPass being off the market in Q4, but some level of contribution, if you want to I'm sure you're not going to quantify it for us here, but just some way of kind of looking at that bump that we're seeing here is maybe 50%, 60% of the CyPass utilization in the U.
S. And
we can kind of use that as
a baseline to start thinking a little bit more about 2019?
Yes. Well, I think, Matt, firstly, the guidance increase is about $12,000,000 from midpoint to midpoint, and international accounts for about 2 of that, U. S. Accounts for about 10. I think all I can say with respect to the I think the heart of your question is, it really is a combination of continued what I'll call organic outperformance, I.
E. Without the benefit of the recall activities. And then an evaluation of all the Q4 scenarios and there's a lot as others have alluded to in this call, a lot of puts and takes that we're evaluating with respect to the remainder of the year. So it's both that outperformance that we've seen and we continue to see as well as incorporating scenarios around a lot of factors including the pickup from the CyPass recall.
Fair enough. Thank you.
Your next question comes the line of Jon Block with Stifel. Your line is open. Please go ahead.
Great, thanks. I want to ask probably too straightforward of a question, but just curious, iPass has been off the market for roughly 2 months and change and you guys are obviously interfacing with many more docs than we are on our end. So Tom or Chris, just a blanket statement, if there were 100 CyPasses being done in the market by a dock, can you give us we all understand it's not a one for one, but is it a 0 point 5 to 1, a 0.2, a 0.7? Maybe if you can just give a little bit more detail on how you think and where those procedures are going? And then I've got 1 or 2 follow ups.
Well, it's Joe. I mean, Tom or Chris can comment qualitatively on what we're seeing and hearing from the market place. But quantitatively, I don't think we can get more granular than it's not one to 1. I think you have conversations in the community. There's a wide variety of that depending upon the type of doctor that you're talking to.
A glaucoma specialist who's seeing a lot of late stage patients that might have been using CyPass, to Chris' earlier commentary, might be shifting a decent chunk of those to tubes and traps or ZYN and procedures like that. For the comprehensive doctor who's seeing more of that moderate patient they might have been using CyPass on, I think we're picking up a pretty good chunk of that. How all that translates over time, we haven't we're just not going to get more granular than it's not one to 1.
Okay. Let me try maybe a different approach. Joe, I guess I'll stick with you then. I believe mid to high teens year over year growth seems implied in your U. S.
Number for the Q4 of 2018 and that's what side pass off the market for the entire quarter. So should we think about that sort of the baseline and that's likely other words, again, you've got the high teens implied in the U. S, but that high teens is being suppressed by the elements of the channel, which should unwind next year? And then I've got one last one for you.
I think that's a good question, John. I think that's a as you think about unpacking it as it turns towards 2019, obviously within a margin of error, because there are a fair number of puts and takes in that and things that will be evolving going into next year. But that's not a bad way of thinking about the trend heading into 2019.
Okay. That's my goal, not a bad way. Last one for you, Chris. Chris, just thoughts on new docs being trained, moving parts. I'm guessing inject has them excited.
You've got better drops and easier procedure to perform. Are you hearing any concerns or any offset to that in regards to ECL and safety when you reach out and you hear back from the next wave of potential adopters? Thanks for your time, guys.
Sure. First, just to remind you, John, that we're focused completely right now on converting our existing customers over to iStent inject. So people that have been using iStent, whether they used it exclusively or in combination with other products, these are the guys we're focusing on. So those that are on the sideline with MIGS will be coming along after we get through that training of our existing docs, which as Joe mentioned, will be sometime during the course of 2019. But yes, there's people very interested in iStent inject.
I do think it's a product that will help to expand the marketplace, and we will get to those people in due time.
Your next question comes from the line of Joanne Wuensch. Your line is open. Please go ahead.
Good afternoon. Thank you very much for taking the question. I have some product pipeline questions. Your commentary on the suprachoroidal stent is interesting because one of the in our doctor due diligence, one of the things that seemed to be the CyPass problem was the where in the eye it was placed. How do you if that is the right information or your view too, how do you compare that to continuing down the road with the suprachoroidal stent of your own and not just sort of redirect those funds and those efforts elsewhere?
Yes. Good questions, Joanne. This is Tom. I'm happy to take this one. So what I would tell you is that as we've said for some time now, since this issue came up and the voluntary withdrawal from Alcon took place, the anatomy in that angle certainly is one of the conditions that we think leads to the endothelial cell loss.
But by Alcon's own admission, they found a tight correlation between the number of retention arches that were visible, that were actually in a way proud of the ciliary muscle attachment. They have a high correlation with endothelial cell loss. And it makes sense because the more retention arches that show that means that the suprachoroidal stent is higher in the anterior chamber and then it predisposed to touch the endothelial cells of the cornea. And they've made they have actually a proportional analysis showing the number of retention arches that show and the correlation with endothelial cell loss. And this can be either due to improper placement or potentially do some migration over time.
So these are really powerful issues that really have led to the endothelial cell loss. When you look at what we have with our suprachoroidal stent, we will determine and look at the data when it's available. Last patient should be at the end of the Q1 next year. But there are some really seminal differences between our product and theirs. Our product is far shorter.
The product is only 4 millimeters in length versus 6.3, so less than 50% the length, but actually less than 50% the inner diameter and other diameter. So it's a far more microinvasive device. Secondly, our device has a radius of curvature, which follows the natural scleral entry path into that potential space, which may have endothelium and the kind of perpendicular nature of more of a straight shunt that you've seen with the outcome device. Again, the data will be telling. So we think there are other differences as well.
We don't have fenestration holes in our suprachoroidal stent, which we think are offer an ability for cells to migrate and basically become an obstructive mechanism within the stent and our stents are coated with heparin. All of these which we think give us the ability to perhaps provide for sustained therapy and maybe give us some appositional types of changes which may alleviate some of the risk of endothelial cell loss. So that's a long winded answer. I think it answers your The data will be telling, we're optimistic. We know that there's an appetite for this kind of a product.
You know it as well with the glaucoma community rather than having to go to a shunt and aqueous shunt or to a trabeculectomy. So we think that we want to continue on course, and try to fill this niche in the future.
Thank you. As my second question, I want to go back to your commentary regarding inject and rollout of it. My impression from talking with physicians is one of the things that they like inject is that it's easier to use. And at some stage, we have theorized that the doctors sitting on the sidelines with easier to use product will now get into sort of the MIGS program. How do you think about going to them in the wake of CyPass with reimbursement somewhat better in certain situations, somewhat not so much, and asking 19 and ramp on the new doctor?
Thank you. Thank you. Thank you. 19 and ramp on the new doctor? Thank
you. So, Joanne, this is Chris. And really we focus on the safety message here. Trabecular bypass is definitely safer, has less sequelae associated with it than a suprachoroidal shunt. And we saw the benefits and features of that, the safety profile and then of course the efficacy that you get from having 2 patent bypasses.
So that message is resonating. I think it's being well accepted. I think to your point, the ease of use also plays into that. And with those three things in mind, I do think that this is a product that people who have been sitting on the sidelines or who are unhappy with the voluntary recall of the CyPass device will be energized when they get this in their hands.
And Joanne, I want to use this as an opportunity to I think completely retire an issue. And the issue is one of whether the endothelial cell loss associated with suprachoroidal has any class correlation or does it affect other MIGS devices. And I'm really terribly delighted, as many of you know, to talk about the FDA's recent pronouncement that there is no evidence to date that this is a class issue that there is any endothelial cell loss associated with other MIGS devices, primarily our trabecular bypass devices. I use this again as an opportunity to stay in the trabecular bypass space, we've been commercialized over 10 years. We have We studied, for over 6.5 years, commercially, that have been sold, many, many others in clinical trials.
We studied for over 6.5 years adverse events in the U. S. Pivotal trial and the first with the classic stent and we found no statistical difference in SAEs between iStent and iStent plus cataract versus cataract surgery alone. So again, I wanted to reassure and hopefully retire the issue completely that there is any correlation of endothelial cell loss with the trabecular bypass space and particularly with our Xtend products.
Thank you. We have no further questions at this time. I'll turn the call back to our presenters.
Okay. Well, listen, I want to thank all of you for your time and attention today and to our investors for your continued support and interest in Glaukos. Thank you and goodbye.
This does conclude today's conference. You may now disconnect. Have a great day.